Advertising companies act as a barometer for recovery, Havas’s chief tells Christopher
Williams, but the source of future growth is digital.

As the British chief executive of a listed French company, living in New York, David Jones has a uniquely transatlantic perspective on business. He runs Havas, a member of the super league of global advertising groups, with annual revenues of €1.8bn.

He describes the company as “the best barometer” for the European recovery, given that advertising budgets are often among the first to rise and fall with the economy, and a high proportion of Havas’s business is done on the continent compared with the other industry giants.

Mr Jones sees the weather changing for the better.

“It’s obviously been a tougher environment,” he says. “But if you look at all the big players there was only one year when the industry was in decline. The growth has been there every other year, even if it’s not been particularly dynamic,” says Mr Jones, 46, whose career in advertising has seen him run agencies in Paris, London and New York.

Europe is slowly recovering, with growth in France and the UK. “We delivered record profits for the first six months and our share price has hit a 14-year high, so it suggests the markets believe that Europe is not a problem anymore,” Mr Jones says.

Havas has not emerged unscathed, but it is easier for advertising companies to downsize than most because of the number of freelancers they use.

To compete on the global stage with the likes of Sir Martin Sorrell’s giant WPP and Publicis-Omnicom, the conglomerate formed by the transatlantic mega-merger of Publicis and Omnicom, Havas needs scale.

But that has to be balanced against creating a company too heavy-footed to respond to the constantly shifting ground on which the industry operates.

“In today’s world in our industry you need to be a global company, but there is a size and scale at which you become too big to change,” Mr Jones says.

“My single biggest focus is digitising our business globally. That is number one because it is very easy to grow in digital and slow [down] in traditional advertising.

“But we need to be able to change faster. When I joined Havas a little over a decade ago, the only phone anyone had was a Nokia, the computer company people were writing books about was Dell and the only internet brand that really mattered to us was Yahoo!.

“My whole focus is to get us to act like a smaller, more entrepreneurial, more dynamic, more agile business, not a bigger one.” Which is not to say that Mr Jones believes the $35bn merger of Paris-based Publicis and New York-based Omnicom, announced with a flourish in front of the Eiffel Tower in July, will be a failure.

The cost savings and global reach are massive. His job is to identify and exploit the opportunities it creates.

“Publicis has been sold to the Americans but nobody has worked it out yet,” says Mr Jones.

“It was orchestrated and happened in Paris so it looked like the French had the upper hand, but in two years the power will all be in New York. Do I think it will be a disaster? Not at all, but there will be talent and clients dropping out so there are opportunities for the rest of us, too.

“People might say I’m just jealous, but I say, 'No, if I had that kind of money I’d be looking to buy something like Instagram or Twitter or Tumblr because I think that is where the game is changing.”

Along with emerging markets, the internet has been the source of Havas’s growth through the recession.

Mr Jones now acts as an occasional adviser to Mark Zuckerberg as he builds Facebook’s advertising business and links to big brands. He is also bullish on Twitter’s prospects as a public company, despite its growing losses.

“If you look back to Facebook’s IPO, people were asking the same questions. I said, 'Guys, I wouldn’t worry about it’.

“There wasn’t a single person sitting on its client council, and that’s the world’s biggest advertisers, who thought Facebook doesn’t work as an advertising platform. Fast-forward 18 months and everyone is now writing about Facebook’s share price booming.

“There’s going to be an interesting battle between Facebook and Twitter, though.”

Mr Jones is radically simplifying Havas’s structure, and its own brand, so that its digital capabilities are in the same buildings as its creative minds and media buyers.

Unlike Publicis, however, there is no plan to loosen ties to France, despite the challenges of doing business under the Hollande government.

“We have absolutely no intention to ever move from France,” he says firmly. “There are negatives like corporate tax going up by about five percentage points. But we’ll never leave.”